Researchers have found the benefits of cutting Australia's smoking rate would be much broader than previously thought.

National Preventative Health Task Force report calls for a $5 increase in the price of an average packet of 30 cigarettes; the aim is to cut the numbers of people smoking from 2.9 million, within a decade. The price of cigarettes would rise by A$5 to A$20 for a pack of 30 cigarettes. (Australia - health blueprint to be unveiled by the Rudd Government...

The study was commissioned by VicHealth, and looked at how cutting tobacco usage would benefit individuals, industry and governments.

The study compared the smoking habits of Australia with California, which share similar demographics.

It found that Australia could cut its smoking rate by a third, by having higher prices for cigarettes and tougher bans on smoking in public, like they do in California.

Professor of Health Economics, Rob Carter says the economy would be $1 billion better off. "It's not just about savings in health expenditure, it also has very important gains for industry in terms of absenteeism and premature retirement," he said.

Carter: "One of the logical deductions from a policy perspective is that if these cost savings are available to you, then probably as a minimum, you should be prepared to put something like that into interventions for change. The gains that we're talking about, even though their substantial gains, are realistic gains and they're measured conservatively."